Eroding Participation in Labor Force Surveys: Evidence, Drivers and Solutions

The subpar quality of labor market data in many parts of the world can hinder economic policymaking. The challenge is exacerbated by a secular decline in response rates to labor force surveys (LFS) observed in numerous countries, which is also captured partially in labor market data issues flagged in the IMF’s Data Adequacy Assessments. This paper documents the evolution of LFS response rates in several countries and explores factors affecting it. By creating a new dataset of LFS characteristics for 39 mostly advanced economies, we find that those with voluntary survey participation have seen the response rates erode 1.5 percentage points per year on average, while the rates have been broadly stable in those with mandatory participation. We also find that survey data collection modalities may affect the response rate. Finally, the paper looks into the effectiveness of various ways in which statistical offices and data users have tried to address the challenges, including adjusting survey methodology and utilizing non-traditional data.